The Secretary of State for Trade and Industry (Ms Patricia Hewitt):
I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"condemns the running down of the Post Office under 18 years of Conservative government, which saw 3,500 post offices close, hundreds of thousands of days lost through industrial action, a lack of investment which allowed the Post Office to slip behind its competitors, a failure to give the Post Office the commercial freedom it needed to invest and compete; congratulates the current Government for giving the Post Office commercial freedom to make its own decisions, enshrining the universal service obligation in legislation, establishing a new regulatory framework, bringing in new managers, modernising and supporting the post office network and encouraging partnership between employers and unions; and furthermore notes that Consignia invested £296 million in the last financial year, is addressing its cost base, strengthening its management and striving to achieve a world class service in Britain.".

Last week, the Conservatives attacked the health service and our health service staff. This week, they are attacking the Post Office, but at least this time the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) had the good grace to praise our postmen and women.

Let me start by paying my own tribute to the men and women who work for the Post Office. They do indeed work all hoursantisocial hoursin all weather, getting the mail through. The work is always hard. It is often inconvenient and uncomfortable, and sometimesas we all recall from the murder of a postman in Belfast before Christmasit is carried out at grave personal danger.

Behind those postmen and women are the sorting office staff. They make the deliveries possible by handling 81 million items every 24 hours. Then there are the sub-postmasters and sub-postmistresses who provide their communities with everything from benefit payments to travellers cheques; and from fishing licences to information on winter fuel payments. I agree with the hon. Gentleman on one point: they provide an invaluable service that strengthens the social fabric.

I agree wholeheartedly with the remarks of the acting chairman of Consignia, Allan Leighton. He said recently that postal workers are

"heroes of their local community . . . they . . . do a cracking job, a fantastic job, in very difficult circumstances".

All of usat least on the Labour Benchesagree with that.

Mr. McLoughlin:
The Secretary of State mentioned the acting chairman of the Post Office. She will have seen an article in The Sunday Times last week that noted that a report prepared by senior Consignia directors, with the help of the investment bank UBS Warburg, concluded that radical surgery was needed. The Sunday Times stated that a copy of the report was held by the DTI. Have the Secretary of State or any of her Ministers seen it? What does it say?

Ms Hewitt:
Opposition Members need to stop relying on speculation in the Sunday press.

Our goals, as a Government, are clear. We want a universal service[Hon. Members: "Answer the question."] I shall answer by spelling out our policy goals

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and what we are doing to achieve them[Interruption.] Opposition Members do not like my answer, and they will like[Interruption.]

Mr. Deputy Speaker:
Order. The Secretary of State was asked a question. She is trying to answer it and I should like to hear her answer.

Ms Hewitt:
Thank you, Mr. Deputy Speaker.

The Opposition did not like my answerthey will like it even less when I come on to their record in government.

Our goals as a Government are clear. We want a universal service that everyone can rely on. We want faster and more reliable mail deliveries. We want a strong network of modern post offices, an effective partnership between management and unions, and a better Post Office for people to work in.

Mr. Gummer:
As all those issues were taken into account in the UBS Warburg report, will the Secretary of State now tell the House whether she has received and read it?

Ms Hewitt:
The right hon. Gentleman seems to refer, once again, to The Sunday Times report. I have not seen The Sunday Times report, and I am not interested in press speculation. Beyond that, I do not know to which report he refers.

Mr. James Gray (North Wiltshire):
The Secretary of State says that she has not seen The Sunday Times report, but is she not aware of the parliamentary answer that she gave my hon. Friend the Member for Eastbourne (Mr. Waterson) today, in which she says:

"Any Consignia Strategic Plan would be commercially confidential and therefore under Exemption 13 of the Code of Practice on Access to Government Information could not be placed in the Libraries of the House."?

Is she not saying that that UBS report, not that in The Sunday Times, is commercially confidential and that she has seen it, but is not prepared to reveal it to the House?

Ms Hewitt:
I have not received the strategic plan for the company. I am waiting for it, and the position is precisely as I set out in my written answer today.

Mr. Connarty:
On the more positive aspects of the comments on the Post Office and its employees, although none of us wants the management and unions to be involved in industrial action because they cannot resolve their differences, will my right hon. Friend give a firm indication that the Government recognise and respect the rights of any work force who cannot reach a settlement through the Advisory, Conciliation and Arbitration Service, or with the management, to take industrial action if they think it necessary, especially if they are not being paid a wage claim that should have been paid last October?

Ms Hewitt:
I shall come to industrial relations later, but let me make it clear, as I have done previously in the House, that I expect management and the unions to sit down, work with ACAS and reach a settlement.

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I have set out clearly the goals of our policy. Because we are committed to those goals, we are delivering the reform and investment that Consignia desperately needs. The Conservative party refused to provide that investment and reform for 18 years. The real shadow hanging over this afternoon's debate is the Conservative party's failure to reform the Post Office.

Mr. Bellingham:
I am slightly confused about the report. The Secretary of State has not told us whether she has read it. I know that she used to work for a company that was in the habit of shredding documents, but will she shed more information on the UBS Warburg report?

Ms Hewitt:
The hon. Gentleman should choose his words more carefully. As he ought to know, I did not work for Arthur Andersen, and he should take care not to make in the House remarks that would be libellous if made outside the House.

The legacy of Tory neglect, underinvestment and failure to reform the Post Office hangs over the Post Office's situation today. Frankly, this debate should have been called "The Conservative Government's mismanagement of the Post Office". Let me remind the House of the record because the hon. Member for Maldon and East Chelmsford seems to be suffering from false-memory syndrome.

In 18 years, the Conservative Government did not care at all about a secure future for the dedicated Post Office workers whom they are now so keen to praise. They did not care about improving delivery for consumers and businesses. They blew hot and cold on commercial freedom for the Post Office. They blew hot and cold on privatisation. Under the Conservative Government, the Post Office was treated as a cash cow90 per cent. of its profits in its most profitable years went straight back to the Government. Between 1981 and 1997, the Conservative Government took a total of £1.7 billion from the Post Office. Let us understand why. In the 1980s and early 1990s, the Post Office was a successful publicly owned company. That is what the Conservative party could not stand.

Mr. Lindsay Hoyle (Chorley):
My right hon. Friend must be well aware that £70 million is still being taken out of the Post Office every year. Will she assure the House that, as there are problems in the Post Office and further investment is needed, that £70 million will not be taken out until it is in a better position?

Ms Hewitt:
I remind my hon. Friend that we have cut the dividend that we would expect from the company from 90 per cent. to 40 per cent. I shall not make any decision on the dividend[Hon. Members: "Oh!"] Wait for it. I shall not make any decision on the dividend that we should expect next year, or in future years, until I have seen the company's strategic plan.

Dr. John Pugh (Southport):
The right hon. Lady said two things. First, she said that, until 1997 or thereabouts, the Post Office was a successful publicly owned company. We would all agree with that. She also said that, in that period, radical reform took place. Will she explain what the problem was?

Ms Hewitt:
If the hon. Gentleman would let me make some progress, I shall explain exactly what the problem

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was, and what happened under the Conservatives. They were not interested in a successful publicly owned company. It did not fit their view of the world, which was, "Private sector good, public sector bad." As we have heard this afternoon, all they did was cream off the profits and leave the Post Office to stagnate.

The hon. Member for Maldon and East Chelmsford had the nerve to tell us that, in that period, other Governments across the rest of Europe had seen the way in which postal services were changing and were taking radical steps to respond. He talked about privatisation and private involvement, but ownership was not the issue. Some postal services in Europe stayed in the public sectorin France and in the Scandinavian countrieswhile others, such as the Dutch and German postal services, obtained investment from the private sector. Different routes were pursued to achieve the same goal: reform and investment. All those postal services were given the chance to do better than our Post Office, which was denied the commercial freedom that it wanted within the public sector and the investment that it so desperately needed.

At the time when, as the hon. Gentleman had the nerve to say, change was happening in the rest of Europe, nothing whatever was happening in the United Kingdom under the Conservative Government. For example, in July 1992, the Conservative Government said that they would sell off Parcelforce and review the status of the rest of the business. Five years and £1.5 million of consultancy fees later, the Conservative party manifesto said in 1997 that, if re-elected, they would sell off Parcelforce and review the status of the rest of the businessfive years to end up back where they started.

Our Post Office was falling behind. While other countries were changing, investing in and modernising their services, our Post Office's productivity was slipping. Between 1992 and 1996, Deutsche Post's productivity, for example, increased by 35 per cent. and overtook that of the British Post Office, which increased by only 13 per cent. in the same period.

The hon. Gentleman talked about industrial relations, which were disastrous under the Conservative Government. In 1996-97 alonethe last year of the Conservative Governmentmore than 800,000 days were lost to strike action. Let us consider the record under the Conservatives. Just like the many other public services that were run down under the Conservatives, our postal service went from being a leader in the 1980s to a laggard in the 1990s.